Dodgy repair, drastic injury: residential occupier not liable

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A judgment obtained by Hunt & Hunt Lawyers - acting for the insurer of a residential occupier, where a subsequent tenant sustained significant injury from prior defective repair work - has been upheld on appeal. The Court held that the residential occupier had not breached the duty she owed to the prospective tenant by engaging a handyman sourced from an ad in the local newspaper without further enquiry as to his trade qualifications or experience.

The decision assists in clarifying the extent of the duty owed by residential occupiers when engaging tradespeople to carry out domestic repairs. Success on appeal was derived from a tactical exclusive focus on liability. The Court's approach is interesting for its consideration and application of section 5B of the Civil Liability Act 2002 (NSW) ("CLA").

The appellant has
sought leave to appeal to the High Court (8 July 2015).

CASE BACKGROUND

Mrs Lui lived in a house that had been purchased in the name of her daughter. Following a storm in December 2007, several appliances in the house including the kitchen range hood failed. Mrs Lui relied on a local handyman to install a new range hood. It was the Christmas period and tradesmen were hard to find. She did not ask about his experience or ask if he was insured. No electrical work was needed and she paid him cash in hand.

Three years later in December 2010, by which time she had moved out and the property had been leased to the appellant (and to two sets of tenants prior), the range hood fell onto the appellant causing significant injury (damages were notionally assessed at over $900k). In the court below, the managing agent - briefed in 2008 to manage the lease - was joined to the proceedings as a defendant but the plaintiff settled with the agent prior to hearing.

It was not in contention that the range hood had failed due to hidden defective work performed by the handyman - in short, he used two screws when at least four screws were needed. Mrs Lui could not recall the name of the handyman and he could not be located. Mrs Lui did not observe any defect in the range hood during the rest of her time in the property and there were no reported defects by subsequent tenants.

ISSUES CONSIDERED

Section 5B of the CLA

Contrary to the respondent's submissions, the Court preferred the view of the appellant that the substance of the appeal was within the ambit of section 5B (1) of the CLA. The respondent had submitted that section 5B was inapplicable because the case was not one of negligent failure to take precautions as envisaged by s.5B (1) but rather a case of a negligent positive act.

The Court then addressed the alleged failure of the court below (which failure was conceded by the respondent) to consider all elements of section 5B (2) of the CLA and considered each in turn, namely:

the probability that the harm would occur if care were not taken;

the likely seriousness of the harm;

the burden of taking precautions to avoid the risk of harm; and

the social utility of the activity that created the risk of harm.

THE DECISION

The decision, while turning on its facts, is interesting because of the consideration given to section 5B of the CLA regarding the precautions that a reasonable person in the position of Mrs Lui ought to have taken against a risk of harm (with particular reference to section 5B(2)(c) and (d)).

Ultimately the only material ground of negligence relied upon by the appellant was the alleged failure of the respondent to make appropriate enquiries of or about the handyman. The appellant did not rely on any duty that the respondent may have owed to her as landlord (and thereby did not rely on the principles expounded in Northern Sandblasting Pty Ltd v Harris 188 CLR 313; Jones v Bartlett (2000) HCA 56 and Sakoua v Williams NSWCA 405). Further, the appellant abandoned her appeal in relation to breaches of the Residential Tenancy Agreement and relevant provisions of the (now repealed) Residential Tenancies Act 1987 (NSW).

Section 5B(2)(a) of the CLA

The probability that the harm would occur if care were not taken in retaining a competent installer was considered "high" because of the consequent risk that a heavy appliance might be affixed (inadequately) to the wall of a frequently used kitchen.

Section 5B(2)(b) of the CLA

There was a significant possibility of very serious harm occurring if care were not taken because the range hood was heavy and, if not affixed properly, could fall on a person who used the stove below.

Section 5B(2)(c) of the CLA

As to the burden of taking precautions to avoid the risk of harm, the Court took into account the difficulties sourcing tradesmen in the Christmas period and the likely delay had the respondent asked questions of the handyman and obtained additional quotations. It was considered that while a reasonable person might have made such enquiries, the question posed by section 5B(2) was whether a reasonable person would have taken such precautions. Relevantly, the Court noted that whether such steps would have led to reduction or elimination of the risk of harm was not addressed at first instance. Ultimately the Court was not persuaded that had the respondent made oral enquiries about the handyman's qualifications or experience, the accident would have been avoided.

Section 5B(2)(d) of the CLA

The Court was of the view that the social utility of the activity that created the risk of harm was significant, having regard to the "essential household activity of cooking".
In reaching its decision, the Court found:

Although the work needed to be done carefully, it was of a minor kind and of a type that a "local handyman" could reasonably be expected to do.

The contractor held himself out as a "tradesman" or "handyman/tradesman" in the local newspaper, a source in which a person in the position of the respondent could reasonably expect to identify a suitable contractor.

The contractor supplied a suitable range hood that was suitable for the premises and installed it without any difficulty apparent to the respondent.

Failing proof of reasonable delegation, the respondent would be liable to the appellant in negligence for the consequences of the dangerous situation created by the handyman inadequately affixing the range hood to the kitchen wall – Laresu Pty Ltd v Clark (2010) NSWCA 180 at (69).

The respondent had discharged the duty she owed, by taking reasonable steps to engage a competent contractor to do the relevant work – Bevillesta Pty v Liberty International Insurance Company at (53); Laresu Pty Ltd v Clark (60); Indigo Mist Pty Ltd v Taouk (2012) NSWCA 342 at (35).

Discharge of the duty owed to the appellant, as a class of person whom the respondent should have foreseen might suffer injury if the respondent did not exercise care, had to be assessed in the context of domestic circumstances and in view of there being no subsequent defect with the range hood from its installation in 2007 until the accident in December 2010.

The "relevant reasonable person" for the purpose of assessing negligence was in this claim the ordinary householder who had no experience in installing range hoods, therefore the Judge at first instance had not erred when taking into account that the respondent had no such experience.

CONCLUSION

Non-commercial occupiers can be reassured that a local handyman can be hired to perform domestic repairs without the need for additional enquiries as to experience, qualifications and insurance (with the proviso that the repairs are minor and appear to be properly carried out at the time)

Section 5B continues to be interpreted in a way that acknowledges variation in the standard of duty of care owed, depending upon the relationship between injured claimants and the alleged tortfeasor. In this decision, a lower standard of care was applied to the domestic occupier than would have been owed in a commercial tenancy.

The "social utility" test contained in section 5B(2)(d) continues to be of significant relevance to overall assessment of negligence where domestic or "family" relationships comprise the factual matrix. In a similar vein the Court of Appeal in Hoffman v Boland (2013) NSWCA 158 decided that there was important and significant social utility in a grandmother providing domestic assistance in the form of assisting with the care of a young baby. In contrast, a narrow interpretation was applied by the majority of the Court of Appeal in Wilson v Nilepac Pty Ltd t/as Vision Personal Training (Crows Nest) [2011] NSWCA 63 (which concerned a claim for damages arising from injury sustained during a personal training session where, relevantly, the relationship was commercial). The majority preferred the narrow interpretation that while "physical activity" was of social utility, the activity that created the risk of harm was the particular (and difficult) crunch exercise - which of itself did not have social utility.

All elements of section 5B of the CLA must be properly addressed for there to be proper judicial assessment negligence.

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